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Published: Thu, July 12, 2018
Medical | By Garry George

Trump administration freezes risk adjustment payments

Trump administration freezes risk adjustment payments

Billions of dollars in payments to health insurers under the Obamacare health care law were stopped Saturday by the Trump administration.

U.S. President Donald Trump departs after speaking at a Make America Great Again rally in Great Falls, Montana, U.S., July 5, 2018.

The Centers for Medicare & Medicaid Services said today that the February action by the trial court in New Mexico "prevents CMS from making further collections or payments under the risk adjustment program, including amounts for the 2017 benefit year, until the litigation is resolved". The White House supported two attempts in Congress past year to repeal the program, which insures about 20 million Americans.

About 20 million Americans have received health insurance coverage through the program.

The Affordable Care Act's (ACA) "risk adjustment" program is meant to incentivize health insurers to cover individuals with pre-existing and chronic conditions by collecting money from insurers with relatively healthy enrollees to offset the costs of other insurers with sicker ones, according to Reuters. Instead, the federal government collects money from some insurers that enrolled healthier patients and then transfers money to other insurers who had sicker enrollees.

Rumors that the Trump administration would freeze payments were circulating late last week. The CMS has appealed the decision, particularly because a MA court upheld such payments. "In light of this analysis, the Government can not lawfully make the cost-sharing reduction payments", the White House said after ending the payments in October 2017. "It will undermine Americans' access to affordable care, particularly for those who need medical care the most". Premiums undoubtedly will rise, and more people will be unable to afford them.

Risk adjustment is an important part of the ACA. "It will allow more companies to get into the insurance market". About $10.4 billion was slated to be transferred previous year.

"We urge the Trump administration to back off of this unsafe and destabilizing plan, and instead begin working on bipartisan solutions to make coverage more affordable", said Brad Woodhouse, the executive director of Protect Our Care, a progressive group that supports Obamacare. "Following through with this latest act of sabotage could raise rates for all consumers even more - on top of the rate hikes they have already caused - and is without a doubt an escalation in the Trump administration's war on people with pre-existing conditions".

New Mexico Health Connections and Minuteman Health of MA, two small nonprofit insurers, filed lawsuits in 2016, contending that the Obama administration created an inaccurate formula that unfairly rewarded large insurers.

Still, insurers are grappling with changes that the Trump administration and Congress have made to Obamacare for 2019. The program does not use any taxpayer dollars.

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